GAO: States to spend most of initial FMAP increase

Share this content:

State Medicaid programs are on track to spend roughly 94% of additional Medicaid funding from the 2009 stimulus package, according to a new report from the Government Accountability Office.

The American Recovery and Reinvestment Act of 2009 allotted approximately $87 billion in Medicaid funding for states through a temporary 6.2% bump in the federal medical assistance percentage. Nearly every state used the extra funds to help cover the cost of increased Medicaid enrollment, according to the GAO, which released its findings Oct. 8.

Over the last three years, Medicaid enrollment nationwide increased by an average of 14.2%. The 6.2% rate increase is set to expire at the end of 2010. A smaller rate increase is set to take effect through June of 2011. To maintain Medicaid sustainability after the rate increases expire, most states plan to implement new provider taxes or impose reimbursement cuts, according to the GAO.